Abstract: The labor interregional mobility in China has important effects on the interregional disparity of China. However, no common conclusion about the labor interregional mobility enlarging or shortening the interregional disparity is drawn from the present researches. Based on the background of institutional transformation of China, this paper suggests that the household register system and the supporting policies endemic to China constructed the system restraints on the labor interregional mobility. These characteristic systems, including the household resister system and the supporting policies, gradually became a kind of "permission system" for those labors who move from one region to another in China. There are two different modes of labor mobility restricted by the "permission system" of ingoing place during the period of institutional transformation of China. One is the mobility of labors qualified above the critical threshold of permission rules of ingoing place, and the other is under. Author calls the former one as the mode of labor migration mobility, and the latter the mode of labor wandering mobility. As the critical threshold of permission rules is mainly the requirement for labor's quality, the labors of high quality always use the mode of labor migration mobility while the labor of low quality can only use the mode of labor wandering mobility. This paper further analyzes the impact of mode of labor mobility on interregional disparity. This research result shows that high quality labors interregional mobility in the period of institutional transformation of China does enlarge the interregional disparity, which is in common with the conclusion of experience. The difference from previous research conclusion is that low quality labors interregional mobility in the period of institutional transformation of China can increase the average income level of comparatively undeveloped areas, and it also enlarge but not shorten the interregional disparity and the rural-urban disparity of China to some extent due to the characteristic system restraints in China.One significant attempt of this paper is to introduce the word "labor quality" into the analysis of the labor interregional mobility. It divides the labor mobility into high quality labor's interregional migration mobility and low quality labor's interregional wandering mobility on the base of the institutional transformation background of China, and further analyzes separately their effects on regional disparity. Therefore, it is probably much more close to the real situation of China, compared with those researches without considering the institutional transformation background of China and the quality differences of the labors who move interregionally. The significance of this paper also includes that author constructs a unified theoretically analytical framework aimed to analyze all kinds of labor mobility in China, which is different from most of the existing research documents.It is known that the rural-urban disparity and regional disparity of China are enlarging in recent years. There are many causes inducing this phenomenon. This paper explains the phenomenon from perspective of the labor interregional mobility, which is possible to help the governments make polices.